The Role of Foreign Direct Investment, Energy and Pollution in Obtaining Sustainable Economic Development

Jednak, Sandra and Minović, Jelena and Kragulj, Dragana (2021) The Role of Foreign Direct Investment, Energy and Pollution in Obtaining Sustainable Economic Development. Polish Journal of Environmental Studies, 30 (6). ISSN 1230-1485

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Abstract

Developing countries have encountered the issues of economic development and reducing pollution
that need to be resolved to achieve sustainable development. However, this topic has not been widely
explored. Since obtaining sustainable economic development is a priority, the nexus between foreign
direct investment (FDI), trade openness (TO), final energy consumption (FEC), capital (K), income,
and pollution (carbon emission) has been investigated in this paper. The research questions deal with the
existence of the long-run, short-run and causality relationship between the selected variables. The paper
aims to investigate these relations in Serbia during 1995-2018 by applying the autoregressive distributed
lag model as the most commonly used and suitable co-integration model. The results present that FDI
and TO will increase gross domestic product (GDP), while pollution will decrease it in the long-run. The
existence of a short-run causality from FDI and TO to GDP is confirmed. The Granger causality test
reveals that FDI has a unidirectional relationship to GDP, carbon emission, TO, and FEC. Furthermore,
GDP, carbon emission and FEC have a unidirectional relation to TO. These results indicate that policies
should combine FDI promotion and TO, with supervision of FDI effects on carbon emission to obtain
sustainable economic development.

Item Type:	Article
Additional Information:	COBISS.ID=45806857
Uncontrolled Keywords:	economic development, energy, environment, Serbia
Research Department:	Sustainable Development
Depositing User:	Jelena Banovic
Date Deposited:	10 Sep 2021 12:24
Last Modified:	10 Sep 2021 12:24
URI:	http://35.240.28.64/id/eprint/1634
Author Links:	[error in script] No links available.

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